Correlation Between Guru Organic and Stakeholder Gold

Can any of the company-specific risk be diversified away by investing in both Guru Organic and Stakeholder Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guru Organic and Stakeholder Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guru Organic Energy and Stakeholder Gold Corp, you can compare the effects of market volatilities on Guru Organic and Stakeholder Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guru Organic with a short position of Stakeholder Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guru Organic and Stakeholder Gold.

Diversification Opportunities for Guru Organic and Stakeholder Gold

0.23

Correlation Coefficient

Guru Organic  Stakeholder Gold

Modest diversification

The 3 months correlation between Guru and Stakeholder is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Guru Organic Energy and Stakeholder Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stakeholder Gold Corp and Guru Organic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guru Organic Energy are associated (or correlated) with Stakeholder Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stakeholder Gold Corp has no effect on the direction of Guru Organic i.e., Guru Organic and Stakeholder Gold go up and down completely randomly.

Pair Corralation between Guru Organic and Stakeholder Gold

Assuming the 90 days trading horizon Guru Organic Energy is expected to generate 1.08 times more return on investment than Stakeholder Gold. However, Guru Organic is 1.08 times more volatile than Stakeholder Gold Corp. It trades about 0.17 of its potential returns per unit of risk. Stakeholder Gold Corp is currently generating about 0.02 per unit of risk. If you would invest  125.00  in Guru Organic Energy on December 24, 2024 and sell it today you would earn a total of  61.00  from holding Guru Organic Energy or generate 48.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Guru Organic Energy  vs.  Stakeholder Gold Corp

Guru Organic Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guru Organic Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guru Organic displayed solid returns over the last few months and may actually be approaching a breakup point.

Stakeholder Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stakeholder Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Stakeholder Gold is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Guru Organic and Stakeholder Gold

The main advantage of trading using opposite Guru Organic and Stakeholder Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guru Organic position performs unexpectedly, Stakeholder Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stakeholder Gold will offset losses from the drop in Stakeholder Gold's long position.

The idea behind Guru Organic Energy and Stakeholder Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.